Qualifying Recognised Overseas Pension Schemes or QROPS as it is more popularly known, offers huge benefits to those who choose to settle abroad after retirement. Introduced in the 2006 reforms, it offers enormous benefits to expats in Shanghai who were otherwise bound by the rather stringent pension laws of the UK.

Certain criteria have been set out by law and only those people who fall under this category can apply for a QROPS transfer. The main condition is that you plan to settle abroad for a minimum of 5 years. Moreover, you have to be a member of a pension fund and have not purchased an annuity as yet. If you fulfill these stipulations, then you need to apply to the HMRC for approval. Even then certain conditions apply as regard to the kind of investment you can make with your money. A limitation has been set regarding the amount that can be transferred and the maximum permissible is 30 % of the entire fund. However, you do get a lump sum together for you to invest as per your wishes.

But before making the move, it is better to make a detailed consultation with a QROPS pension expert so that you can get the maximum benefit out of it. One can only transfer funds to a scheme that is approved by HMRC. Despite its restricting stipulations it does offer several advantages to British expatriates in Shanghai in China. With a large British community in Shanghai, a number of British nationals often choose to settle there permanently after retirement.

The main benefit that you get by a QROPS transfer is that you are no longer liable to pay the rather high rates of taxes that are imposed in the UK. First of all, you are no longer obliged to buy an annuity. Further, you are free from any taxation within the UK on the income accrued. This is because your income then falls under the jurisdiction of your chosen country. Inheritance taxes in the UK are quite high and more than half the amount goes in taxes on your death. However, if you utilize the QROPS pension, your children will get the entire amount without having to pay any tax. So, in effect, it offers tax savings for you as well as your beneficiaries.

Besides the considerable tax savings, there are additional benefits too. For instance, you have greater flexibility in terms of investment and you can utilize your savings the way you want it. Though the HMRC specifies which pension schemes are included in the QROPS pension, still you have a wider choice in front of you as compared to the options available within the UK. This wider choice ensures that you are somewhat insulated against market forces.

One factor that holds much importance is that a country like China has a higher growth rate than the UK. With predictions that these higher GDP growths will continue for the next few years, it stands to reason that your investment will prove highly profitable.

In short, it can be safely said that a QROPS pension has many benefits for British expatriates settled in Shanghai.